Like many of you, my first full-time job wasn't as an entrepreneur. I too "worked for the man" and earned my steady paycheck. And each month, I advanced a little. But never as quickly as I wanted.
And what did this cause?
It caused me a lot of stress, discomfort and anxiety.
I was in a position that I wasn't comfortable with. I wanted something better.
The other day I realized what I really had been feeling was a lack of control, which in turn caused my stress and discomfort.
In fact, according to the new book, The Art of Choosing, by Sheena Iyengar, the ability to make our own decisions is critical to our sense of well being.
For example, studies show that it isn't the company's CEO who's most likely to have a stress-related illness or heart attack. No. It's actually the CEO's assistant! Research shows that the less control we have, or that we think we have, the higher the likelihood of stress, back pain, mental illness, high blood pressure, getting sick, and so on.
So what does this mean for you?
1. If you're still working for someone else, and are feeling the stress of not controlling your destiny, then now's the time to launch your own business. I'm not necessarily saying to quit your job until your business is generating income. But I'm saying to at least take pen to paper and write down your business plan and strategy so you can start planning out your venture. (As you know, I designed my business plan template specifically to help with this).
2. If you are running your own company, make sure that you give enough authority to your employees. You don't want your employees to feel a lack of control. This will lead to stress and they will get sick more often, won't be as productive, and so on.
Note that I will be releasing a new Leadership course later this month that reveals lots of leadership tips, but to start, make sure your employees have some decision-making authority and a feeling of being in control within their areas of responsibility.
I recently interviewed sales expert Marvin Montgomery.
And I don't use the word "expert" lightly....Marvin has 30 years of sales training experience, served as director of sales for one of the country's largest jewelry store chains (where he trained over 1,200 associates in 95 stores) and is the author of the book "Practice Makes Perfect: The Professional's Guide to Sales Success."
Marvin gave me tons of great sales tips during the interview, but one thing really stood out to me.
He told me he'd been invited to the weddings of people to which he has sold products and services. Now, these were NOT people he knew beforehand. But people that he met when trying to sell them something.
Imagine that for a moment. Inviting your salesman to your wedding. You get a phone call from a salesperson. Or you're at the department store and a salesperson is trying to sell you a vacuum. And, then, a few short months later, you're inviting them to your wedding!
Marvin and I both agreed that this is the ultimate sales test - if your prospects and/or customer invite you to their wedding, you are truly a great salesperson!
Now, to accomplish such a feat, Marvin explained that you need to start by having a "servant mentality" and really listening to and serving the needs of your prospects. By doing so, you create real, lasting human-to-human bonds, which will massively increase your chances of making the sale.
Remember, people (not companies if you are selling to businesses) make buying decisions. And a key part of a person's buying decision is how they feel about the salesperson. Your job is to make the prospect feel good about themselves, which will make them like you more!
In the interview, Marvin focused on the "3 R's" of selling: Repeat business, Referrals, and Requests.
You can listen to the full interview here, but here's a key point that he mentioned for each.
Repeat business: repeat business starts by satisfying the customer the first time. And a key to satisfaction is to eliminate buyer's remorse. Marvin explained that re-affirming the person's buying decision helps here. A simple phone call or letter starting with "you made the right decision and here's why...." can eliminate buyer's remorse, increase satisfaction, and set the customer up to buy from you again.
Referrals: Once you know your customers are happy, you need to ASK for the referral. Marvin differentiates between "planting a seed" and actually asking; and explains that specifically asking is key. A great idea that he mentioned was getting the customer to visualize who they can refer. For example, he gave this example: "I know that you're in the local rotary club - are there any other members of the club that you think could also benefit from this service?"
Requests: Requests are when a prospect specifically requests to work with you, rather than anyone else at your company. When someone specifically requests you, clearly you have a much greater chance of making the sale. One of his keys here was "lagniappe" which is defined as a small, unexpected extra.
Does this work? Well, I'll give you a personal example here. Every Monday I bring bagels into the office. There are two stores from which I can buy bagels. A while back, one of the workers at one of the stores gave me 2 extra bagels at no charge. Since then, I only go to that one bagel store and I always wait for that worker to serve me. Yes, it works.
In the interview, Marvin gave a ton more insight into the 3 R's and also talked about keys to sales team management, how to hire sales staff, and how to get more customer leads and prospects.
You can download or listen to the interview here: http://www.growthinkuniversity.com/members/427.cfm
Or listen to a short clip in the player below:
Is it possible to double, triple, or even quadruple your sales conversion rates?
It sure is.
And to explain how, you simply have to spend an hour with the world's best salesperson - my daughter.
You see, kids are pretty amazing sales people. They ask for something. And when they don't get it, they ask again, and again, and again.
So, my 7-year old daughter wanted a horse figurine. So she asked me to buy it for her. I said I'd think about it. So the next day she asked me again. And again I replied "Let me think about it."
This routine continued day after day after day. Until finally, I broke down and bought it.
Now the lesson here is simply -- persistence is absolutely critical to sales success.
Consider these statistics from the National Sales Association:
* 2% of sales are made on the 1st contact
* 3% of sales are made on the 2nd contact
* 5% of sales are made on the 3rd contact
* 10% of sales are made on the 4th contact
* 80% of sales are made on the 5th-12th contact
This is truly amazing -- your chances of closing the sale go up 40 TIMES when you try 5-12 times.
Likewise, a recent report from The Bridge Group found that it takes an AVERAGE of seven touches to "convert a suspect to a prospect." These touches may include phone calls, direct mail, email, webinars, or face-to-face encounters among others.
Once again, the key is persistent follow-up. You cannot afford to give up on prospects after the first, second, or even third or fourth contacts. By continuing to follow-up with them, you will skyrocket your sales conversion rates and profits.
The EASIEST way to ensure consistent, high quality persistent follow-up is using Autoresponders. Autoresponders are automatic emails that you send at defined intervals. So, for example, you can automatically send high quality emails to your prospects every 3 days for a month in order to increase your conversion rates. In the Ultimate Internet Marketing System, we dedicate two modules to Email Marketing where we cover how to expertly use emails and autoresponders to increase your conversion rates. Learn more here: http://www.growthink.com/products/internetmarketingsystem
In 2002, the CEO of Integreon, Liam Brown, sat in Growthink's offices in Los Angeles.
Integreon was just getting started and had 4 employees.
In the subsequent months, we worked with Integreon on its strategy and to developed its business plan.
The rest, as they say is history.
After raising rounds of capital and growing like gangbusters, Integreon is now a global provider of outsourced research, legal and business Knowledge Process Outsourcing (KPO) services. It currently has 2,000 employees and offices throughout the world.
And just today, the company announced that it raised another $50 million in expansion capital.
But the big amount is not what excited me most when I heard about the raise. It was the one tiny phrase in the press release that most others probably missed: "a substantial minority stake."
I like when the $50 million investment only accounted for a "minority stake" in the company. It means the company is worth over $100 million, and probably much more than that.
Yes, the right strategy and business plan can produce amazing results!
Actually, opposites do NOT attract.
Government bureaucracy does not equal economic prosperity.
Centralization of power in Washington does not equal representative democracy.
Regulatory complexity does not equal consumer protection.
Lawyers parasitically feeding off...well, everything does not equal justice.
Senior citizens fighting maniacally for their social security, for their Medicare, for their drugs, in the face of crippling federal budget deficits does not equal paying it forward.
Teachers' unions, fighting school choice and merit-based pay does not equal U.S. competitiveness.
And complaining about any/all of the above does NOT equal doing something about it.
No, if you want to help create good jobs for all of those that want them, if you want to insure a better future for our children, then:
Turn OFF the TV.
Turn down the radio.
Put down the newspaper (though you probably have done that already).
Start A Business. That business idea you've been kicking around for years? Well, join the 6 million Americans every year (that's 3% of the adult population) and start a NEW business. In addition to pursuing your dreams, you will also be doing more to create jobs than the government ever will. Why? Because 2 out of 3 of all new jobs are created by new and young (less than 5 years old) firms. Click here to learn more.
Grow A Business. If you own or manage an existing business, go for it. Launch that new product. Offer that new service. Try that new marketing strategy. Implement that new software. Apply for that bank loan. If you don't know how, or need inspiration, read Entrepreneur, Inc. and Fast Company Magazines. This list, too.
Invest IN A Business. Supporting good non-profits is great, but even better is to support entrepreneurs while making excellent money doing so. Startup investing has outperformed every major investing class, with IRRs of over 27.3% (click here to learn more). Compare this to the Dow Jones (returned less than 1% annually these last 10 years), or real estate (2%), or the current cash/money market yield (0.7%).
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As providers such as Android gain traction in the market place, and iPhone alters the requirements for applications carried in its AppStore, a slew of entrepreneurs have been working tirelessly to create engaging applications for smart phone owners.
Growthink has worked on a number of projects with these emerging companies and offers the following insight to individuals who are looking to break into the lucrative mobile application market.
The success of Apple, which, as of January 2010, had 3 billion downloads from its application store has fueled much of the development in the application sector. Some 100,000 applications have been developed, many of which see their income not from the per application download fee, but in engaging the consumer past the point of purchase.
At the Digital Media Conference West, Norwest Venture Partners’ Tim Chang stated “that in order [for an app] to do $10 million in revenues in the App store it must appear in the top 5 for 3 months.” This is an important point for entrepreneurs out there – find a way to monetize your customer based on their activity; a sustainable business model will include revenue past the point of sale.
One space that has found a way to do this is mobile gaming. Mobile game technologies have been wildly successful, even amidst the economic downturn through the sales of virtual goods which are then paid for using micropayment technology. Micropayments have been enormous money makers for companies like Zynga, Playfish and Japan’s Mobile Game Town. Even traditional game development companies have gotten involved in mobile gaming; Electronic Arts produces Monopoly and Rock Band for the iPhone, to name a few and recently acquired Playfish for $400 million in cash and stock.
As would be expected, venture capital has followed the mobile gaming space. Zynga, the creators of Farmville, claim to have 20 million users and have raised $219 million in venture capital to date. Their latest round occurred in December 2009, and was $180 million dollars at a $1 billion valuation. PopCap Games raised $22.5 million in Series A capital in October 2009 – their claim to fame? Bejeweled, the 7th highest grossing game in the App Store.
The mobile application space, and more specifically the mobile gaming space, are two exciting sectors in which there have been a number of emerging companies taking storm over the past six months. The best performing companies have learned early on that the key to success is an application that engages the user beyond the point of purchase and provides for daily active user engagement. Companies that are prepared to create engaging games with well thought business models have the highest chance of success. This is based on the market conditions as well as the eagerness in the venture capital community to become involved with new developers in the marketplace.
There’s one role in an organization that most entrepreneurs and business owners’ don’t really understand.
It’s not the Marketing Manager. That’s pretty easy. The Marketing Manager is in charge of marketing the company’s products. It’s not the Sales Manager. Or the Operations manager either. These roles are also quite evident.
But the CFO (Chief Financial Officer) role confuses most entrepreneurs.
In fact, most don’t really understand what a CFO does, or think that the CFO role doesn’t apply to their business until they’re much bigger.
Well, recently I had the opportunity to learn more about the CFO role when I interviewed Jonathan Weiss.
Unlike many of the interviews I’ve done, Jonathan is not a famous author, investor or renowned entrepreneur.
No, Jonathan was simply a classmate of mine when I went to business school at UCLA (The Anderson School). But when I started speaking with him at our 10-year class reunion a few months back, I realized he had some special expertise.
You see, Jonathan had recently been the CFO of a small company, LA Rose, which manufactures fashionable uniforms for healthcare workers.
The company had been around for a few years and was generating $3 million in annual revenues when he joined it.
But in short order, Jonathan helped grow revenues from $3 million to $10 million, and then he helped sell the company for a nice multiple.
I listened to Jonathan’s story in amazement, and the questions started flowing. What did he do as the CFO of that company? Do all businesses need a CFO? What should my clients be doing to replicate his success?
But rather than monopolize Jonathan’s time at the reunion, I requested a telephone interview to ask these questions, and he was kind enough to oblige.
Here's an excerpt of my interview with Jonathan:
Click here to listen to and/or download the full interview and/or transcript.
Now, before I brief you on some of the interview’s highlights, let me explain the core role of the CFO.
As the title implies, a CFO or Chief Financial Officer is responsible for helping the company achieve it’s financial objectives.
Specifically, the CFO:
Ensures that key financial metrics (e.g., last month’s sales, current inventory levels, etc.) are reported in a timely manner.
Ensures that the company has enough cash to fund its growth
Helps improve the profitability and efficiency of the company
Figures out where assets should be invested
So, for example, some specific things that Jonathan did at LA Rose were as follows:
1. He created a financial dashboard. This dashboard showed the business owners exactly how the company was fairing on key metrics such as month-over-month sales, inventory levels, etc. This helped the company set and accomplish goals. Importantly, he also put key financial figures in terms that the business owners could understand so that they were able to make better decisions.
2. He improved the profitability of the business by better focusing the owners’ time. For example, one owner was amazing at designing new uniforms. But, she was only spending 10% of her time doing that (and spent her other time managing customers, employees, etc.). When those other roles were delegated and she focused more of her time on design, sales and profits skyrocketed.
3. Product sourcing. Jonathan boosted profits by finding new suppliers to manufacture the same quality uniforms at a lower cost.
4. New financing. Jonathan identified that much of the company’s capital was tied up in receivables (e.g., money owed to it by customers). He used a unique combination of factoring and receivables insurance to get this money from third parties at a low cost. The money was then reinvested in the company, and sales went up dramatically.
5. Investments. Jonathan made investments in IT that helped streamline operations and cut costs, boosting long-term profitability.
Whether your company needs to hire a CFO right now is up to you. But clearly someone needs to be performing the CFO role if you hope to really grow your revenues and profits.
To hear Jonathan tell his story and reveal his best CFO tactics, click here to listen to and/or download the full interview and/or transcript.
Recently I had the opportunity to interview Scott Jordan, founder of All Credit Lending Solutions.
All Credit Lending Solutions was formed in 2005 to help small business owners in obtaining commercial financing from banks and other alternative lenders and can be found online at yourbusinessloannow.com.
Scott gave some nice tips on raising debt capital in today's environment. Click here to listen to the full interview, or listen to a preview below.
To begin, Scott mentioned that building your credit score is key to getting debt financing for your business.
As you may know, Dun & Bradstreet's Paydex is the primary source for business credit scores. Paydex scores can range from 0 to 100, and Scott said that a score of 70 or above is necessary for a business to get unsecured lines of credit.
With regards to startups, who don't have a business credit score, you ideally want to have a personal credit score above 680.
In either case, Scott stressed the importance of spending the time to manage and improve your personal and business credit scores.
For those folks who don't have great credit, Scott revealed two other things that will help in receiving debt financing. The first is having orders in hand from reputable customers, and the second is having assets which you own free and clear that you can use as collateral.
Another key point which Scott revealed is that entrepreneurs and business owners need to "think like a banker." Bankers, according to Scott, think "safety first." You need to show the banker multiple ways in which you can repay the debt; e.g., via revenues, liquidating assets you own, etc.
Scott also mentioned that your chances of receiving a loan multiply when 1) you are very clear on the reason why you need the loan, 2) put together a quality business plan, and 3) get all your financial documents in order for the bank's review.
Click here to listen to the full interview, or listen to a preview below.
I created 3 new videos for you, revealing proven techniques you can use to increase your productivity.
In other words, you'll learn how to get more done, make more money, and take more time off.
Video 1: How to Create More Time
This video explains the "Pareto Principle" and the 4 Quadrants of Productivity.
Video 2: How to Achieve Your Goals
In this video, you'll see how to
Video 3: How to "Multiply" Yourself
In this video, you'll learn:
The general misery that the public markets have subjected us all to over the past 12 years - with the Dow Jones, the S & P, and the NASDAQ all trading lower today than they were in 1999, begs the question - how does stock market performance affect startup investing returns?
The answer seems obvious. A falling tide sinks all boats. So goes the public markets, so go the private equity markets, of which startup investing is a subset.
This is best illustrated by the depressing statistic that in the last 12 years there has been more money invested into the venture capital industry than has come out of it.
A lot of effort for naught.
But in spite of this, and maybe even because of it, startup investing returns over the past decade have been surprisingly, even shockingly good.
According to data compiled by Thomson Financial and corroborated by eight large studies in the US and the UK over the past three years, average returns for startup investing were in excess of 20% annually this past decade, and over a longer 20-year period, have averaged more than 25% annually.
Why Is This and Will It Continue?
If you step back and think about it for a moment, these high returns make perfect sense. Startup investing is high returning because:
1. As Compensation for Illiquidity. As the vast majority of startups are privately-held firms, higher returns must be offered as compensation for illiquidity. You can't day-trade startups as you can public stocks. This, of course, is both a good and a bad thing.
2. As Compensation for High Variance. Startup investing is characterized by a few winners and lots and lots of losers. To incent investors to play this high volatility game, alluring terms and returns must be offered.
3. Small Businesses are Fundamentally More Efficient Allocators of Capital. The plain but powerful truth is that a startup firm is by FAR the most efficient form of human organization ever devised to allocate time and capital.
And with more efficient allocation of time and capital, higher returns naturally follow.
As Picasso so famously said, "Work is the Ultimate Seduction."
And the most seductive form of work for the best and brightest these days is to start and grow a company.
Best illustration of this - in spite of throwing millions at them, Google has a hard time hanging onto their best engineering talent.
The wonder kids just prefer their own gigs. Always have, always will. And anyone who has spent just a little time with a dynamic entrepreneur knows, they're in it to win it.
And when they do, like Picasso's Les Demoiselles d'Avignon, the results just take your breath away.
Are you in it to win it too?